Seller advice: Check on buyer cash reserves

Property sellers should make it a condition of awarding a mandate that their agent will fully pre-qualify any potential buyer – and not just to see if they would qualify for the requisite home loan.

Home loan pre-qualification can be obtained through a reputable bond originator like BetterBond, and many prospective buyers do so these days so they can establish their

buying power before they go house-hunting.

But it is not enough to have a bond pre-qualification certificate. Buyers also need sufficient cash reserves to cover all the additional costs of a home purchase, including a deposit if necessary, bond registration, legal fees and transfer duty, otherwise the transfer will be delayed or even fall through.

And this is where most will need an agent to advise them. Agents should thus ensure that they have all the correct costs at their fingertips.

Even though home values have risen only slowly over the past few years, prices are higher each year, and most of the “hidden” costs of home buying are applied on a sliding scale, so the more expensive the property, the greater they are. Thus even those buyers who did anticipate these costs when they started looking for a home may have underestimated the amount of cash required.

It is worth noting that the lack of access to a proper buyer pre-qualification service is a major factor in the failure of many private home sales to come to fruition. Home owners trying to sell their own properties tends either to forget that potential buyers will need substantial cash reserves to be able to cover the additional costs, or to be too embarrassed to ask buyers about their financial status.

A qualified and experienced estate agent, on the other hand, will only be perceived as acting in the best interests of his or her client when informing the potential buyer of all the extra amounts payable, and then checking to see whether the buyer can actually pay them, on time.